In 1946, the Dean of the University of South Dakota School of Law, Marshall McKusick, typed (or had typed for him) a monograph titled The Historical Evolution of the Homestead Exemption in South Dakota. (2) I discovered a copy--perhaps the only copy--in the basement stacks of the McKusick Library at that same law school. The thirteen-page, typed monograph, as is stated on its cover page, was written "for teaching purposes." (3) If one counts back to the birth of Dakota Territory in 1861, Dean McKusick's 1946 monograph covers eighty-five years of homestead law in South Dakota. (4) The aim of this article is to update his monograph and include the last seventy-two years of South Dakota homestead law. In my previous article with this review, Prequel to Homestead, I unpacked the pre-statehood statutory history and constitutional debates leading up to 1889--the year in which South Dakota became a state and enacted its constitutional homestead provision. (5) Here, I aim to complete a historical assessment of South Dakota's homestead exemption, focusing upon the state constitutional developments of the homestead right after 1889 in published decisions of the South Dakota Supreme Court.

Following a reconstruction of that narrative, this article assesses current homestead law. (6) The homestead exemption protects shelter as a fundamental human need. It defines that protection in terms of a "family," broadly conceived. (7) While the basic requisites for shelter are unchanged since 1889 (advancements in engineering, technology, and design aside), the idea of a family has been more dynamic. (8) The state constitutional framework for homestead laws, meanwhile, has remained static. The primary thrust of this article discusses the history, evolution, and scope of South Dakota's homestead laws in a state constitutional context as interpreted by the South Dakota Supreme Court. (9) It concludes with an assessment of layering asset protection strategies--a trust or a limited liability entity--with homestead protections. (10)

II. DISCUSSION

SOME CONTEXT AND SOME DEFINITIONS

Homestead rights secure a family's shelter against financial misfortune. (11) The law achieves this aim, perfectly or imperfectly, in three primary ways; first, by suspending creditor remedies against the homestead res. The rights of a homeowner's creditors are impaired so as to better secure the use of the home by its owner. (12) There is an element of protectionism at work here, to be sure. Otherwise rightful creditor rights give way in favor of securing an individual's or family's home against financial catastrophe. (13)

Secondly, homestead rights aim to shelter the marital relationship by suspending unilateral alienation rights. (14) One spouse, acting without the other, can neither mortgage nor convey the homestead. (15) Both spouses must join the conveyance or mortgage in order for the act to be effective. The prohibition of unilateral spousal alienation rights ensures that spouses either act in concert with regards to their homestead or not at all. (16) The prohibition advances the aim of providing stability to the marital relationship. (17) This second aim overlaps with the first and is typically given less importance by courts and commentaries. (18) Its application is more limited than the first because, while homestead creditor rules apply to any homeowner (including single persons), the marital-related protections only apply to a married owner. (19)

Third, and decidedly least important (or at least less commonly litigated), homestead descent rights allow a surviving spouse and minor children to continue to reside in the family home following the owner's death, free from claims by other heirs or creditors. (20) These survivorship rights help protect the family homestead even after the chief breadwinner's death. (21) The aim with this third protection is clear: securing a surviving family's continuing right to shelter. (22) It overlaps to some degree with the first two aims.

Several related objectives are bundled in the justifications for the overall aims of homestead laws--securing a family's shelter against financial misfortune. (23) Homestead protections seek to ensure a basic human necessity: shelter from the elements; protection of life and safety. (24) This aim is achieved largely by sheltering the home res from creditors. Because shelter is a fundamental human need, it might even be argued that homestead laws represent as a peculiar variety of human rights legislation. (25) To the extent that families are saved from having their home sold by their creditors, the homestead exemption also serves to lessen the burdens on governments and communities caused by homelessness or excessive vacancies. (26) The withholding of basic needs such as safety might lead to increased criminality and lawlessness, creating even more demands on government resources. (27) Depending on the scope of exception creditors to the homestead, the exemption might also be characterized as a kind of consumer protection law, preventing the owner from overextending her credit since it deters creditors from relying on the ability to recover an unpaid debt from a homestead property. (28)

The secondary aims of homestead laws sketched above--protecting spouses by rejecting unilateral alienation attempts and ensuring shelter in the form of occupation rights for a surviving spouse and minor children--coincide with the first aim, with the additional hoped-for benefit of helping ensure the integrity and cohesion of an owner's family. (29) Interestingly, then, homestead laws are located at an intersection of typically conservative political values (protecting the traditional nuclear family and the sanctity of marriage) and traditionally liberal political values (governmental paternalism and consumer protection). (30) The debtor is in part protected from his own natural tendency to overspend, while at the same time, the solidity of his marital relationship and the sheltering of his offspring are reinforced by the state. (31) Homestead laws thus represent a unique combination of consumer protection and traditional family values legislation.

To match up with these aims, three varieties or subtypes of homestead laws must be recognized and labeled. First, the "homestead exemption" describes the inability of creditors to force a sale of one's home. (32) Second, the requirement that both spouses join a conveyance of the homestead property I will label the "homestead veto." (33) Third, the inheritance characteristics of a homestead property when an owner is survived by a spouse or minor children--these inheritance or survivorship rights I will call the "homestead descent." (34)

As the reader is now beginning to suspect, the term "homestead" in these various legal contexts can prove slippery. (35) Even more generally, when referring to this bundle of different characteristics of homestead rights, the use of the term can be troublesome. "Homestead" in a general sense typically refers to the extent and contours of the exemption from creditor claims or, alternatively, the characteristics of property itself which qualifies as a homestead. In these senses, the homestead means a privilege or bundle of defined rights and limitations in regards to certain realty. (36) Alternatively, the term can simply refer to that parcel of realty which may enjoy these characteristics. (37) Here, I will call the exemption and its characteristics the "homestead right" or "homestead privilege" and the res itself the "homestead property." (38)

OUR STORY So FAR

The starting point for the legal history of South Dakota is April 19, 1858. (39) On that date, the federal government entered into a treaty with the Yankton Sioux tribe. (40) The Yankton Sioux agreed to withdraw to a 400,000 acre reservation tract in present-day Charles Mix County. (41) The tribe ceded an enormous, triangle-shaped swath of land in exchange for a fifty-year annuity of $ 1.6 million (42) Later that same year, a convention resolved to elect a provisional body to petition Congress to designate Dakota Territory; the process was repeated the next year. (43) Following ratification of the Yankton treaty on February 17, 1859, and a brief dispute regarding the timeline for the Yankton tribe's withdrawal, the territory opened to white settlers in July. (44) About 1,000 white settlers, who had camped along the territorial borders, quickly swarmed in. (45) Those pioneers joined others already squatting on town sites like Sioux Falls. (46)

Dakota Territory officially became a territory in March of 1861. (47) William Jayne, the first territorial governor, was a doctor from Abraham Lincoln's hometown of Springfield, Illinois. (48) Jayne had been Lincoln's personal physician (49) The territorial government also...